<![CDATA[This study examines how the collapse of Islamic microfinance institutions, particularly Baitul Maal wat Tamwil (BMT), can be understood as a systemic failure of risk governance rather than merely a liquidity or financing problem. It focuses on how cognitive, structural, procedural, and sharia-ethical failures disrupt maqasid al-shari'ah protection. This study employed a qualitative comparative post-collapse case study of two Islamic microfinance institutions, referred to as BMT-A and BMT-B. Data were collected through semi-structured interviews, chronological interviews, document analysis, cross-actor clarification, and limited observation of institutional traces. This study involved 30 informants who served as the primary data sources. The analysis combined within-case analysis, cross-case comparison, thematic coding, pattern matching, and maqasid al-shari'ah impact mapping using Auda’s systems approach. The findings indicate that the collapse of BMTs occurred through the interaction of cognitive, structural, procedural, and ethical-sharia risk governance failures. These failures manifested themselves through a narrowing of the meaning of risk, weak supervisory accountability, and non-corrective control mechanisms, resulting in a maqasid al-shari'ah misalignment. The study is limited to two post-collapse cases and is not intended for statistical generalisation. Its findings, however, offer an analytical basis for developing maqasid al-shari'ah-based early warning systems in Islamic microfinance. This study contributes a maqasid al-shari'ah-based risk governance failure model that positions maqasid al-shari'ah not only as a normative ideal or performance indicator, but also as a diagnostic framework for explaining institutional collapse in Islamic microfinance.]]>
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